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MACRA: A New Era for Medicare Payment

For decades, under the flawed Sustainable 
ice Growth Rate (SGR) system, a fee-for-serv paymentmodelmeant that higher performing physicians had no ability to be rewarded for outcomes. Health care reform initiated a gradual transition from a volume-based payment system to one that incentivizes clinicians for providing quality care. The pinnacle of this transition was passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which replaces the SGR, establishes a framework for a quality-based system, streamlines quality reporting programs into one system and reauthorizes two years of funding for the Children’s Health Insurance Program. MACRA also creates stability for Medicare payments by mapping out payment updates for ten years and beyond – stability that was severely lacking under the SGR formula.


MACRA is comprised of two pathways in which clinicians will participate in order to receive Medicare payment: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APMs). Most clinicians will participate in MIPS, which bundles the Physician Quality Reporting System (PQRS), the Value Modifier and the Electronic Health Record (EHR) Incentive Program into one program. Advanced APMs open up new methods of paying providers under Medicare. Regardless of which pathway a clinician participates in, he/she will be measured on four core components: quality, resource use, clinical practice improvement and meaningful use of certified EHRs.

The Centers for Medicare and Medicaid Services released the proposed rule to implement MACRA earlier this year, which introduced a plethora of acronyms and provisions and laid the groundwork for a final rule expected this fall. Under the proposed rule, the first MIPS and APM performance period will begin in January 2017 and any payment adjustments will be applied to payments received in 2019. Similar to the current reporting programs, MACRA does not require immediate data reporting; however, in order for clinicians to understand how their performance impacts their payments, it is important to understand the new system and begin preparations now. For most clinicians, this will mean evaluating your current PQRS, Value Modifier and EHR Incentive Program participation. The ACC continues to have conversations with CMS and Congress to determine how to best transition clinicians to the new value-based payment system under MACRA.

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